Sustainable housing and real estate in Kitchener-Waterloo Region

You’ve found the home of your dreams- now what?
January 13, 2009, 2:57 am
Filed under: Buying, Rebecca Sargent | Tags: ,

Once you have found the perfect property, it’s time to make an offer! This is where having a REALTOR® can really help you!

You want to be realistic in your offer; something that you can reasonably afford, and something you think that the other party will reasonably sign. So how do you come up with the price? Your REALTOR® should provide you with a some information on comparable properties to help you decide on proper pricing. Comparable properties should include a couple of active listings, recently sold listings, and expired listings from the last 6 months or less. In Ontario, your REALTOR® has access to information sheets on a property through their local real estate board online databases and the MLS systems.  The information sheets usually detail the price, days on market, type of property (ie. Single family residential, duplex, condo), number of bedrooms, lot size, and other such details. Listings should have similar qualities (ie., # of bedrooms, property size, type of home); the more similar, the better the comparison.

Active listings let you know similar properties’ current asking price. Sold listings help to give you an idea of homes that were probably fairly reasonably priced and this can be a good marker to know what the actual selling price is in your area for your type of home. Expired listings tend to indicate a price that was too high for the market (or sometimes some sort of other deficiency or problem with the listing). This will make it easier for you to decide whether the sale price matches the local reality and whether you should offer more, less than or equal to the asking price.

It is advisable to include a home inspection clause in your offer. Sometimes it will be necessary to include certain other clauses to protect your interests. For example, if the property has a well, a fuel tank or a fireplace, there are certain certifications that can be obtained or requested to ensure they meet standards and are in proper working order. If you have any concerns about the property, bring them up with your REALTOR® and make sure they include the proper clause(s) to protect you.

All fixtures and chattels that are staying with the property should be clearly expressed on the offer, so that there is no confusion at closing. It is advisable to get the make and model number for each appliance (and even pictures if you can during the viewing or inspection) so that if there is any dispute over chattels and fixtures at a later date, you have substantial backing for your claims. Fixtures are attachments to the property that may be personal property. This could be things like a chandelier, or pool filtering equipment. Chattels are things that may not be specifically attached to the property but that would be considered (by some) to be part of the property. This could include such things as the stove, the refrigerator, washer and dryer, etc.

Your REALTOR® will probably use a standard Agreement of Purchase and Sale form provided by the Ontario Real Estate Association (OREA) and probably attach a Confirmation of Cooperation and Representation and a Working with a REALTOR® brochure. These contracts have pre-printed standard clauses that have been approved by OREA. It is not advisable to stoke out any of these clauses without understanding what they mean. They have been developed to protect everyone’s basic interests. Ask your REALTOR® to explain anything you don’t understand– this is why you pay them– to answer your questions and facilitate the real estate process. The Confirmation of Cooperation and Representation and Working with a REALTOR® brochure set out the relationship between you and your REALTOR®. I have included sample versions of these forms below.

Sample purchase and sale

Sample Confirmation of cooperation and representation

Sample working with a realtor brochure

Usually a deposit will be attached with the offer as a sign of good faith. The deposit can also be given upon acceptance of the offer (once all parties have signed and agreed to the offer).

Your REALTOR® will then present the listing agent (the seller’s agent) with the written offer, which can be either be accepted, rejected or counter-offered by the Seller. You should not sign the offer if you are not happy with the details inside because you are bound to it once it signed legally. Usually the offer is conditional upon inspection or other conditions as found in the purchase and sale agreement, and so doesn’t become what we call “firm” until a later date.

If the Seller rejects your offer, you can either come back with a better offer or move on to a different home. Offers are rejected for many reasons. If you DO make another offer keep in mind the following: the price, the closing date, the number and type of conditions, and which fixtures or chattels are included. Sometimes simple things, other than just the price are keeping the seller from accepting. If the Seller counter-offers to you; you then have the choice to accept, reject or counter-offer. This goes back and forth until a final agreement is reached or the parties decide to walk away.

There is then usually a period of time for the conditions to be waived. This would give you the time to get home inspections, or financing papers together and finalized. Once the conditions have been met, you can waive the conditions using a Waiver form.Once all conditions have been waived, the deal is considered “firm” and now set to finalize.

Any changes to the conditions, purchase price, chattels, etc. will probably be made on an Amendment form.

After this point, the offer goes to your lawyers office where they check the title and do all the closing arrangements. You will probably have to go in and sign documentation at this point with your lawyer.

Then comes the closing date and it is time for you to move!